On the 11th of July the oil prices fell more than 1 per cent, hitting two-month lows on extended selling after the market’s break below a key technical support level due to oversupply fears.

The market last week slumped nearly 8 per cent in its biggest weekly losses in six months and already hit a two-month low on Thursday after disappointing drawdowns in US crude and gasoline inventories pointed towards weak demand.

The rising US oil drilling rig count and cuts in bullish hedge fund bets on crude to four-month lows also added to the hard fall in prices.

“We have shifted to a bearish trading stance and off a neutral posture that we had maintained for approximately a month following transition from a bullish view in early June,” said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates.

Brent crude futures settled down 51 cents, or 1.1 per cent, at $46.25 per barrel. The session low was $45.90, the lowest since May 11.

US crude’s West Texas Intermediate (WTI) futures slipped 65 cents, or 1.4 per cent, to settle at $44.76 a barrel.

Both benchmarks fell further in post-settlement trade, with WTI sliding 2 per cent to a fresh two-month low of $44.42 on the back of the thinnest trading volume in five sessions.

“We have suggested the likelihood of a price downdraft in WTI and Brent to about $37 and $38 areas, respectively,” Mr Ritterbusch said, adding that the move lower could be volatile, however, with occasional rallies of $1 to $2 a barrel.

Oil prices were down since trading began in Asia on Monday as refiners in that region cut back on crude orders due to worries of an economic slowdown.

The market shrugged off data from market intelligence firm Genscape, which according to traders reported a drop of 488,625 barrels at the Cushing, Oklahoma delivery hub for US crude futures during the week to July 8th.

A Reuters poll, meanwhile, forecast total US crude stocks fell 3.3 million barrels during the week to July 8th.

“Oil prices could drop more,” said Fawad Razaqzada, analyst at forex.com in London. “In the short-term, the bulls will need WTI to climb back above $46 and Brent $47, otherwise prices may head at least towards the support trend.”

West Texas Intermediate (WTI), also known as Texas light sweet, is a grade of crude oil used as a benchmark in oil pricing. This grade is described as light because of its relatively low density, and sweet because of its low sulfur content. It is the underlying commodity of New York Mercantile Exchange’s oil futures contracts.